Overview
- The Federal Open Market Committee voted 9-3 on July 29 to keep the federal funds rate at 3.50%–3.75%, with Dallas, Cleveland and Minneapolis Fed presidents Lorie Logan, Beth Hammack and Neel Kashkari dissenting in favor of a 25 basis point hike.
- Chair Kevin Warsh has shortened meeting statements and dropped routine forward guidance, a change that shifts emphasis to market prices and incoming data for clues about policy.
- Long-term Treasury yields spiked after the July meeting, with the 30-year yield reaching roughly 19-year highs as investors demanded higher pay for future inflation and repriced expectations for Fed moves.
- Warsh told reporters higher long-term market rates were partly 'doing the Fed's work' by tightening financial conditions, but his press conference drew criticism for lack of clarity and raised questions about his credibility.
- Major forecasters and traders quickly revised timing for the next hike, with market odds centering on September and firms such as J.P. Morgan moving their call to December 2026, leaving volatility likely until Warsh’s Jackson Hole speech or the September FOMC meeting provides clearer guidance.